News Corporation Introduces The Daily, a Digital-Only Newspaper

Rupert Murdoch on Wednesday pushed the send button on The Daily, a news application designed for the iPad that he hopes will position his News Corporation front and center in the digital newsstand of the future.

“New times demand new journalism,” Mr. Murdoch said on stage at the Solomon R. Guggenheim Museum in New York before an audience of reporters, media executives, employees and advertising partners.

The Daily will be a first of its kind for tablet computers: a general interest publication that will refresh every morning and will bill customers’ credit cards each week for 99 cents or each year for $40.

In journalistic and marketing ambition and scope, The Daily recalls USA Today when it began in 1982: a publication of no city or region that aspires to be a first-read in the homes of millions of Americans despite having no brand recognition.

“This is about as close as you’re going to get to the first big test of content on the iPad,” said Mike Vorhaus, the president of the media consulting firm Magid Advisors.

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The Daily is published as an app for iPads. Subscribers pay by the week or the year.Credit
Jonathan Fickies/Bloomberg News

For Mr. Murdoch and the News Corporation, The Daily represents something far grander and more ambitious than a new business undertaking: it is an opportunity to try to reinvent the business model for news publishing.

“There’s a growing segment of the population here and around the world that is educated and sophisticated that does not read national print newspapers or watch television news,” said Mr. Murdoch, the owner of television stations and newspapers around the world. “We can and we must make the business of newsgathering and editing viable again.”

With vibrant photos, crisp black-on-white text and high-definition video, The Daily is pan-media — a news Web site, a glossy magazine and a network newscast. Its articles run the gamut from breaking global news to feature writing.

It has the sensibility of a tabloid. There is a separate section for gossip, which is listed as the second section, after news. “Only in The Daily” boasted a brightly colored bubble superimposed over one article in Wednesday’s edition. A headline accompanying an article about the crisis in Egypt blared in a large, boldface font: “Falling Pharaoh.”

Mr. Murdoch indicated that The Daily was intended for a generation of consumers who expect “content tailored to their specific interests to be available anytime, anywhere.”

But the generation of readers that has grown accustomed to curating the abundance of news content on the Internet rather than reading it in one daily or weekly publication has also grown accustomed to having it free.

The Daily’s price is deliberately low. Available only on iPads, it will be free to users for the first two weeks, courtesy of a sponsorship deal with Verizon. After that, it will cost 99 cents a week (or “14 cents a day,” as Mr. Murdoch put it), or $39.99 a year.

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To mark their companies’ partnership, Eddy Cue, left, an Apple vice president, and Rupert Murdoch, chairman of the News Corporation, appeared at an event on Wednesday for The Daily.Credit
Mark Lennihan/Associated Press

With roughly 15 million iPads already sold, the pool of potential customers is not yet large enough to yield the kinds of returns that the News Corporation would need to quickly recoup its initial investment in The Daily — roughly $30 million. Mr. Murdoch said the costs of producing The Daily would be around $500,000 a week, relatively low because it requires none of the machinery needed to produce and distribute a printed news product.

“Our ambitions are very big, but our costs are very low,” Mr. Murdoch said. Subscriptions will make up the bulk of The Daily’s revenue at first. Advertising will make up a smaller piece. So far HBO, Virgin Atlantic Airways and Range Rover are among those to have signed on.

The endeavor has the full weight of the News Corporation behind it, a fact underscored by Mr. Murdoch’s appearance at The Daily’s debut reception. Fox News, part of the News Corporation, broke into coverage of the civil unrest in Egypt to carry the event live. In response to viewer comments that Fox News was covering the news conference because the business was owned by the same boss, Neil Cavuto, the business anchor said, “that might have something to do with it.”

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The News Corporation has cultivated a close relationship with Apple and its co-founder Steven P. Jobs, who agreed to allow recurring subscriptions of The Daily as part of an arrangement that stood to benefit fledgling projects at both companies, according to one person with direct knowledge of the discussions about The Daily’s development. This person spoke only on the condition of anonymity because the conversations were intended to be confidential.

The News Corporation agreed last year to make Fox programs available on Apple TV for 99 cents, making it the only network other than ABC to do so. Apple in turn agreed to throw its considerable muscle behind The Daily, this person said. Mr. Jobs said he would appear at the debut event alongside Mr. Murdoch, but Mr. Jobs was absent, having recently taken a medical leave from Apple.

Mr. Murdoch has taken great interest in the development of The Daily from its earliest stages. His appearances in The Daily’s offices at the News Corporation’s Manhattan headquarters have been a common sight for staff members, who see him there about once or twice a week meeting with top managers.

The Daily’s importance within the company was underscored further on Tuesday when the company named its new chief technology officer: John McKinley, the executive who oversaw The Daily’s design.

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Jon Miller, left, head of the News Corporation’s digital media group, and Jesse Angelo, editor of The Daily, outlined their new iPad app, available for 99 cents each week or $40 a year.Credit
Jonathan Fickies/Bloomberg News

Mr. Murdoch had initially planned to call it The Daily Planet, after the fictional newspaper that employed Clark Kent in the Superman comics. But DC Comics would not agree to grant the rights to use the name, said a person with knowledge of the project’s development, and the News Corporation settled for The Daily instead.

As groundbreaking as The Daily is, it is also freighted with risks. Whether consumers will regularly pay for news content on their tablets is far from certain. Sales of iPad applications for magazines have been uneven, and many newspapers give their applications away free.

And as with many first-generation innovations — the Newton tablet from Apple, the Internet service Prodigy and the EV1 electric car from General Motors — there is always the risk that The Daily is ahead of its time.

“There’s always the danger you’ll be too first,” said Alan D. Mutter, a media consultant and writer of the blog Reflections of a Newsosaur. “Remember Friendster. Friendster turned out to be roadkill.”

Other publishers, which have been pressuring Apple to allow them to sell subscriptions through the App Store, are hoping The Daily is a turning point for how news applications are sold and distributed to consumers. With few exceptions — one being The Wall Street Journal, another News Corporation product — Apple has not allowed media companies to sell more than one issue at a time through its App Store.

Apple’s vice president in charge of iTunes, Eddy Cue, who appeared with Mr. Murdoch at the Guggenheim on Wednesday, said Apple would have an announcement “very soon” regarding subscriptions for other news publications, but he did not say when or whether the arrangement that The Daily had would be extended to others.

Analysts said that because the scale of The Daily’s business would be small at first, the News Corporation should expect success to build slowly.

“Even if you did a great job of creating an app that people pay for, success will come in small numbers,” said Sarah Rotman Epps, an analyst with Forrester Research. “I think they need to take the long view.”

A version of this article appears in print on February 3, 2011, on Page B1 of the New York edition with the headline: News Corp. Heralds Debut of The Daily, an iPad-Only Newspaper. Order Reprints|Today's Paper|Subscribe